Who does what in an export transaction

An international sale involves more people than the buyer and the seller. Knowing who usually does what makes it easier to ask the right questions and to read an offer correctly. This article explains the roles in general terms. In every real transaction the sales contract and the agreed delivery term decide who is responsible for what, so treat this as orientation, not as legal advice.

The seller and the buyer

The seller agrees to supply goods and the buyer agrees to pay for them. Their sales contract (or purchase order and order confirmation) sets out the product, quantity, price, payment terms, delivery term, timing and the documents the seller will provide. Most of the questions below are answered by that contract.

Exporter and importer

The exporter is the party that sends the goods out of the country of export and is responsible for the export formalities there. The importer is the party that brings the goods into the destination country and is responsible for the import formalities and duties there, unless the contract says otherwise. Often the exporter is the seller and the importer is the buyer, but not always: for example, under some delivery terms the seller also handles import clearance, and in some trades an agent or distributor acts as importer.

Manufacturer exporter and merchant exporter

A manufacturer exporter makes the goods it exports. A merchant exporter sources goods from manufacturers or suppliers and exports them without manufacturing them itself. India’s Foreign Trade Policy, administered by the Directorate General of Foreign Trade (DGFT), uses both terms. For a buyer the practical point is to know who manufactures the goods, because specifications, quality documents and some certificates come from the manufacturer or its site, even when another business is the exporter.

At Vencilla, Vencilla Medtex LLP works as a trading, sourcing and export business; for pharmaceutical products Vencilla Pharma works with contract manufacturing partners. The supplying partner is confirmed for each enquiry.

Freight forwarder

A freight forwarder arranges transport on behalf of the party that pays for it: booking space with shipping lines or airlines, consolidating cargo, arranging pick-up and delivery, and preparing or collecting transport documents. Which party appoints and pays the forwarder depends on the delivery term.

Customs broker

A customs broker (in India commonly called a customs broker or customs house agent) prepares and files customs declarations for the exporter or importer and deals with the customs authority. In India, export declarations are filed electronically through the customs portal ICEGATE.

Carrier

The carrier (shipping line, airline or road haulier) physically moves the goods and issues the transport document, such as a bill of lading or an air waybill.

Banks

Where payment is made through a bank instrument such as a documentary collection or a letter of credit, the banks of the buyer and seller handle the documents and payment according to the agreed terms. Many letters of credit refer to rules published by the International Chamber of Commerce.

Inspection and testing bodies

Some buyers, contracts or destination markets call for pre-shipment inspection, testing or certification by an independent body. Who appoints and pays the inspector is agreed in the contract.

Why the delivery term matters

Delivery terms such as FOB or CIF, defined in the International Chamber of Commerce’s Incoterms rules, set where the seller’s delivery obligation ends, who arranges and pays for main carriage and insurance, and where risk passes from seller to buyer. The same product priced on different terms can therefore involve different parties and different costs for each side.

Frequently asked questions

Is the seller always the exporter?
Usually, but not always. The contract and the delivery term decide who handles export and import formalities.

Do I need my own freight forwarder?
It depends on the delivery term. Under terms where the buyer arranges main carriage, the buyer usually appoints the forwarder; where the seller arranges it, the seller does.

Why should I ask who the manufacturer is?
Because specifications, quality documents and some certificates relate to the manufacturer and its site. A clear answer helps you judge the offer.

Sources: International Chamber of Commerce, Incoterms rules (iccwbo.org); Directorate General of Foreign Trade, Foreign Trade Policy (dgft.gov.in); Indian Customs electronic filing (icegate.gov.in).